Tax burden in Monroe leads state

Monroe County homeowners have the highest local property tax burden in the state and one of the highest in the nation, according to a study commissioned by the Pennsylvania House of Representatives.

DAVID PIERCE

Monroe County homeowners have the highest local property tax burden in the state and one of the highest in the nation, according to a study commissioned by the Pennsylvania House of Representatives.

Pike County homeowners rank third statewide when it comes to the amount of local property taxes paid as a percentage of median household income.

The report, prepared by the Legislative Budget and Finance Committee, examined Pennsylvania's system for valuing properties for taxes and reassessing properties relative to each other to assure tax fairness.

In Pennsylvania, properties are assessed on the county level using a base year to determine comparable values. Monroe County last conducted a comprehensive reassessment of all properties in 1988 and all improvements (new structures) since then are valued as if they had been built in 1988.

The county rankings in the report were compiled by the Tax Foundation, a nonpartisan educational foundation, based on U.S. Census Bureau surveys.

Median annual real estate taxes paid in Monroe County totaled $3,343, based on the Tax Foundation survey for 2006 through 2008. The median amount of taxes paid ranks fifth among Pennsylvania counties.

But based on Monroe homeowners' median household income of $62,986, Monroe ranks first statewide with 5.31 percent of that income going to county, municipal and school property taxes.

Pike County homeowners' median property tax bill totaled $2,842, with 4.59 percent of the $61,877 in median income going to local property taxes.

Monroe ranks 111th nationwide in total property taxes paid, but 52nd nationally in percentage of income going to property taxes. Pike ranks 155th nationally in tax paid and 96th for the percentage of median income going to local taxes.

The top 10 counties nationally for percentage of median household income going to property taxes are in either New York or New Jersey. Passaic County, N.J., is first, with 8.34 percent of its $85,088 median income going to property taxes.

"Property taxes have been traditionally high in that area," said Kail Padgitt, a staff economist at the Tax Foundation. "New Jersey is particularly known for that."

He points to a high demand for services and high wages for New Jersey's high property taxes.

High property taxes in Monroe and Pike counties reflect rapid population growth during the past two decades that spawned new school construction and additional staff.

"Expansions like that — property taxes are going to have to drive that," Padgitt said.

Many states with high local property tax burdens try to offset it by providing more aid to localities, he added.

The state report focused on how individual properties across Pennsylvania are assessed for taxes and how those systems compared to other states, particularly Maryland and California. It paints a bleak picture for counties that reassess in hopes of creating fairer relative property values.

Only 25 percent of the 54 reassessments conducted between 1988 and 2008 achieved "national standards for uniformity and equity" one year later, the authors said. "And most of those that met the standard the first year did not by the third."

There isn't a "one-size-fits-all" standard for determining when a county should reassess, said the report.

The report calls for consolidating state general assessment laws, developing uniform standards for reassessment contracts and creating a state revolving loan program to help counties pay the millions of dollars it might cost to reassess.

The report says the state should at least consider authorizing a state agency to supervise county assessment activities. Other options the report didn't take a position on include amending the state constitution to allow residential and commercial property to be treated as separate classes and capping the amount of individual tax hikes following a reassessment.